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The findings from e-reward's research programme are published in a series of research reports, launched in June 2002 - a collection of case studies, surveys and toolkits on contemporary reward issues.

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The regulation of remuneration in financial services

E-reward commissioned Andrew Menhennet, Director of AM Reward Consulting, an independent reward consultancy, to update his 2009 e-reward report summarising the current position in the ongoing development of the regulatory framework for remuneration in financial services.

*** To purchase a copy of this 53-page report, please email your invoice details to paul@e-reward.co.uk. We will then invoice you and email your report in Adobe PDF format on receipt of payment. The price of the report is £75 + VAT. Also available as part of an annual subscription. ***

This new report:

  • explains the revised FSA Code in depth – how it works, who it covers, the main elements

  • provides detailed “Guidance for supervisors” on the revised FSA Code, extracted from reports issued by the Basel Committee on Banking Supervision (BCBS) and the European Banking Authority (EBA), and explains how this can help firms understand what is expected of them under the Code

  • looks in detail at the FSA’s final rules on disclosure of remuneration

  • examines the background to the revised Code and how familiarity with this broader context can assist reward practitioners in understanding and implementing the revised Code.

Section 5 lists the key publications we have analysed in researching and writing this report, with web links so that you can download the relevant document in PDF format. Section 6 contains a glossary of terms. There then follows a series of checklists and document extracts.

Click here to download the contents and introductory pages in PDF format.
 

 

REPORT CONTENTS

SECTION 1: INTRODUCTION
Overview
The context - crisis in the financial services industry
What you will find in this report
Summary of key findings

SECTION 2: THE REVISED FSA CODE
What is the Financial Services Authority?
How does the revised Code work?
Which firms are in scope?
Code staff
The “de minimis” concession
Phased implementation of the Code
What are the main elements?
Principles 1-5: Risk management and governance
Principles 6, 7, 9, 10 and 11: Capital, government intervention, pensions, hedging and avoidance
Principle 8: Risk adjustment
Principle 12: Remuneration structures:

  • Performance measures

  • Guaranteed variable pay

  • Ratio of fixed to variable pay

  • Early termination

  • Form in which variable pay is paid

  • Deferral

  • Malus and clawback

SECTION 3: DISCLOSURE
The background
Overview of FSA final rules on disclosure
What firms must disclose
Disclosure and proportionality

SECTION 4: BACKGROUND TO THE CODE REVISIONS – REGULATORY DEVELOPMENTS IN 2010
FSB - Peer Review
BCBS - Assessment Methodology
Third Capital Requirements Directive (CRD3) and UK Financial Services Act 2010
IIF/Oliver Wyman Compensation Report
BCBS - Risk Metrics
CEBS - Final Guidelines

SECTION 5: SOURCES OF INFORMATION
Links to key publications

SECTION 6: GLOSSARY
Abbreviations used in the report

CHECKLISTS
1: FSA Proportionality Tiers
2: FSA Code Principles and Proportionality Tiers
3: Disclosure requirements for Proportionality Tiers

DOCUMENT EXTRACTS
1: FSA Remuneration Code
2: Amendments to the Prudential Sourcebook (BIPRU)

LIST OF BOXES
1.1: Timeline of events
2.1: FSA proposed supervisory approach
2.2: Examples of Code staff

LIST OF CHARTS
4.1: Global regulatory cascade

Issue - 79

Pages - 53

Type - Toolkit

Date - 27/04/2011

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